One neighbor tells us, Franco appears to be setting up a production shop at his home and the film crews are creating traffic snarls on their small street, making parking impossible -- and even blocking some driveways. They also grouse kids in the neighborhood are at risk because of all the cars coming and going.

But the traffic is just the tip of the iceberg -- one neighbor says Franco's in-house film operations generate huge amounts of trash that blow onto her property ... and his security has little regard for her privacy, leering at her every chance they get.